A final status update after 3.5 years:
- My initial enthusiasm on seeing the demand disappear (July 2013), was short-lived. It was due to a temporary technical glitch - Income Tax Efiling website failed to get data from Income Tax Assessment Database, hence it showed as nil demand.
- The demand re-appeared on Income Tax Efiling website again.
- I never directly received a reply from Jurisdictional Assessment Officer regarding the Intimation U/S 143(1).
- I was unclear on the process to meet the assessment officer (i.e., will I immediately get to see him/her, or they will send me back and ask to come on another day, etc) & did not want to take leave on a working day.
- After my initial postal reply (Feb 2013), CPC set aside the demand notice U/S 245, and gave me my refund, so I didn't bother to get the status updated
- Income Tax Efiling website started displaying an option to submit a response to the outstanding tax demand. I consistently kept replying "DO NOT AGREE WITH DEMAND", quoting my previous letter to the AO & CPC. However, there was no action/ reply from the AO at all.
- However, again in 2015, I was due for another refund, and I again received a notice U/S 245 to adjust my refund towards outstanding tax.
- I again sent the same representations to CPC & Jurisdictional AO. I didn't get a response from both. However, CPC this time ignored my reply and adjusted my refund against the outstanding demand.
- Luckily, Income Tax Efiling website started displaying the Tax Computation under which the said Old demand (for physically filed ITR of previous years) was generated (starting October 2015).
- The Tax demand was due to: TDS Mismatch in Form 26 AS (due to Canara Bank failing to quote my PAN when depositing TDS on Interest from FD), and for another year, the AO completely missed/ignored the Advance Tax that I paid, while computing the demand.
- I found the Hon'ble Delhi High Court ruling in this regard (PAN not quoted, but Tax paid via TDS), and also the corresponding Instruction by CBDT. I was clear that the law was on my side, and I have been sent demand notice unfairly.
- References: CBDT Instruction 05/2013, Hon'ble Delhi High Court Ruling
- In the meanwhile, Income Tax department published the email ID of Jurisdictional AO. I sent an email promptly, asking for details. No response. I spent a year sending reminders, no response.
- Finally, after the November 8 Demonetization, I really got frustrated with the Income Tax Department on how they harass / ignore / mistreat honest people for years together.
- Think about it: If I never disclosed the Interest Income (10% TDS paid) from Canara Bank, I never would get tax demand (because what is reflected in the computer Form 26AS will match what I would have dishonestly declared). Because I honestly disclosed all my income (including income not captured by the computer data Form 26AS), and paid additional tax (i.e., 20% more tax for 30% tax bracket) + Interest U/S 234 B/C, I am harassed for all these years with an incorrect Demand Notice (for the 10% TDS that I already paid, but not reflecting in their computer Form 26AS). Also, this 10% TDS is proven & given to them via Form 16 A that I submitted along with the IT Return in the first place - But they chose to ignore it on purpose, because some directive said, they should not give credit when PAN number is not quoted. And imagine, many years before this rule, Income Tax Department already mandated banks that opening new Bank account requires submission of PAN number. My opening of this FD account started with me submitting my PAN card in the first place. So if the bank does not enter my PAN number in their computer system, or the bank did not quote my PAN number in their TDS Return, The punishment is given to --- Surprise, Surprise, ME (via demand notice)....
- I again researched my options, and I found the Public Grievance Portal (pgportal.gov.in).
- I submitted my Grievance against Income Tax Department on the portal, and voila ! Within 2 weeks, the grievance was transferred from various higher-ups all the way down to my assessment officer, and I could track the progress of my case.
- The Assessment Officer asked me for documentary evidence (via email, thankfully). I sent my Form 26AS, Form 16A (Bank interest TDS) scanned copy.
- Within another 2 weeks, the AO ruled in my favour. For one year (2009-10), the entire demand was nullified (and I was promised a refund of my incorrectly adjusted refund for another year). For another year (2010-11) the demand was significantly reduced from 53,500 to 1000 Rs only.
- The adjusted demand reflected in my Income Tax Efiling website within another 1 week, and there was a helpful option to pay the Rs.1000 demand online. I promptly paid it, the new payment reflected in my Form 26AS.
- I hope finally I can heave a sigh of relief, 4 years after I was notified of a demand, 7 years since the closure of the respective financial year.
- Final note: Form 26AS still does not reflect the TDS deposited by Canara Bank (Where PAN was not quoted). The AO has manually adjusted the demand notice. As per CBDT instruction, the AO now has to follow up with the Deductor (Canara Bank) to rectify the TDS statement (At which point, the data should reflect in my Form 26AS), but I'm not very hopeful of that happening in my lifetime - Given that I just spent 7 years on a trivial issue.
- I hope & pray that the matter is settled finally, and I don't get any more surprises - Where again the (incorrect) computer data Form 26AS will override the AO's (updated) demand notice.
CAclubindia
